Monthly Problem-Driven Consumption Index
PDCI Predicts Increase in Spending for September
The Problem-Driven Consumption Index (PDCI), a leading indicator of consumer spending, increased in September, measuring 181.6, up from 160.1 in August. This data suggests there will be an increase in spending for September relative to August. The increased PDCI score stems from an increase in how much consumers were planning to spend to solve the problems they are experiencing coupled with a slight increase in the number of problems they plan to solve.
The PDCI is up 14% relative to September 2016. This year-over-year increase is driven by an increase in the amount consumers plan to spend solving problems, even though number of problems consumers plan to solve has decreased.
The PDCI is derived from responses to the Consumer Problem Survey (CPS). The PDCI is based on two primary components: the quantity of problems consumers are seeking to solve, and the amount consumers plan to spend solving them. The CPS is a monthly survey of a nationally representative sample that measures consumers’ problems that require market solutions, thereby allowing the researchers to track the quantity of, severity of, and the types of problems that consumers experience. Data is population weighted to eliminate survey completion bias. The PDCI calculated based on the results is scaled by the CPI-U. Because problem recognition usually precedes purchases, the data from the CPS provides an unprecedented view of future consumption and spending. To learn more about the CPS, watch our video HERE.